Home Service Life Insurance
What Does Home Service Life Insurance Mean?
Home service life insurance is a policy that is priced significantly lower than other types of life insurance, typically ranging from $10,000 to $15,000. It is sold by brokers who go door-to-door, making it particularly popular among low- to middle-income buyers. The small face amount puts these policies in the same range as burial insurance, which families often buy to cover funeral costs and final bills rather than replace lost income.
This type of insurance is also known as industrial insurance.
Insuranceopedia Explains Home Service Life Insurance
The term “home service” refers to the practice of salespeople being assigned specific neighborhoods and selling life insurance policies by visiting homes within those areas. Payments can be made in cash or by mailing checks, which is why industry experts sometimes refer to it as a “no-technology system.”
Due to its affordability, home service life insurance is popular among low- and middle-income demographics. Buyers in this income range typically have other low-cost options to compare against, including policies marketed as life insurance for low-income families. However, it has its critics, who argue that the policy appears inexpensive primarily because the cost is broken down into monthly payments rather than being paid as a lump sum. Additionally, they point out that the coverage provided may be less than the total premiums paid over time. That gap between premiums paid and benefits received is one reason it pays to look at the average cost of life insurance across policy types before signing up for any one product.
